This archive report was first published on 19 May 2020.
Kenya's pension schemes have amassed Sh1.3 trillion as of December 31, 2020, and are now backing a new proposal that will allow members to access up to 40% of their savings to buy a home.
This move is expected to increase home ownership among members, as pension schemes have invested billions of shillings in building commercial properties and high-end residential properties for sale in the past.
However, under the new proposal, pension schemes will shift their focus to rent-to-own properties, where members can buy houses via a plan in which they save and repay mortgages via their pension schemes.
Association of Retirement Benefit Scheme chairman Simon Nyakundi said members support the new law, noting that it will encourage home ownership among members.
"Everyone needs a home and most workers' dream is to own a house upon retirement. Enabling members to own a home early in their working life means we are preparing our members for a dignified retirement," he said.
Experts said the new pension scheme changes will benefit the sector with Kenyans expected to increase their savings, anticipating to use part of it to buy a house.
Under the new proposals, pension schemes will be tasked with playing an oversight role where they will retain the property ownership documents eternally until a member retires or dies, in which case it will be released to his family.
The trustees will also conduct due diligence for any property to be bought by a member and be party to the contract to ensure no one abuses the facility aimed at benefiting the saving public.
